Planting Progress in the U.S. and South American Weather Update - Friday, 06 May 2016

Corn exports from the U.S. remain strong, traders are thinking that the USDA may need to double the current estimate from 25 million bushels to 50 million.  In a recent marketing letter I told you about the abundance of corn currently held in China and the new policy to replace its domestic stockpiling program with direct subsidies for growers.  This decision now turns Chinese producers into competitors with the U.S. for global corn demand. Some inside the trade have also been speculating that if it is true that China plans to export a large portion of their domestic supply, they may actually be trying to artificially inflate corn prices.  Kevin Van Trump explained it this way, “Think about it this way, if the Chinese truly are sitting on 50-55% of the worlds entire corn supply, and they do in fact need to sell a large portion, they would be fools to let prices massively devalue.”

The president of the Mato Grosso grain industry group, Aprosoia has stated that farmers in the Brazilian state will not have enough corn to meet delivery commitments.  Producers in this area have committed to export contracts 62% of the anticipated crop, crop failures from drought conditions will make these contracts impossible to fulfill. Brazil had been relying on this second corn crop too boost the domestic supply but in some areas they have not received rainfall in 30 days, farmers in some of the hardest hit areas are not expected to not even bother harvesting their crops.

There is still a good deal of time left for the current weather woes to linger. Argentina is unlikely to conclude its soybean harvest until late June, the same time that Brazil’s safrinha harvest begins. The latter harvest will run through August.

 

The weather concerns in Argentina also continue.  The Ministry of Agriculture in Argentina estimates that 19% of this year’s corn has been harvested compared to 32% a year ago and soybeans harvest is 24% complete compared to 60% in 2015.  The heavy rains seen in Argentina recently are responsible for yield losses and for the slow harvest progress.

To compare the measurement in (mm) of rainfall to inches, the conversion is approximately 25 mm = 1 inch.

 

The latest USDA planting progress data has estimated the U.S. corn crop to be 45% planted, matching last year’s pace but ahead of the 30% average for this date.  A few notable states to mention:

·        Iowa has 57% of the corn planted vs average of 28%.  7% emerged.

·        Illinois is 66% planted vs average of 38%. 25% emerged.

·        Indiana has 30% planted vs 22% average. 4% emerged.

·        Minnesota is 59% planted vs 27% average. 5% emerged.

·        South Dakota is 12% planted vs 21% average. 0% emerged.

 

 

 

U.S. soybean planting is running slightly behind last year with 8% in the ground vs 10% a year ago but slightly ahead of the 5-year average of 6%.  Net-net the trade views the numbers as “neutral”, this week’s weather is expected to jump that number to an estimated 20% planted by next week.

 

The precipitation map shown below gives us the rainfall expectations through-May 10th.  The eastern portion of the country can look for rainfall this week while the remainder of the country should remain mostly rain-free until this weekend.

 

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